When does charisma matter for top-level leaders?

We were interested in understanding how individuals evaluate and select leaders—particularly top-level leaders. We know of two psychological mechanisms by which we do this and which are usually seen to be at loggerheads. On one hand, inferential processes suggest that we evaluate leaders based on the extent to which they fit our image of what an ideal (charismatic) leader looks like. On the other hand, attributional processes suggest that we evaluate leaders on the basis of past organizational performance which they are thought to be responsible for. Our question was: how do we reconcile these two mechanisms?

How was the research carried out?

We conducted two studies. In the first study, we focused on US presidential elections—a somewhat unconventional context for management research but one that is particularly well suited to studying our question (for reasons we develop in the paper). More specifically, we extended an existing econometric model of voting (i.e., Ray Fair’s presidential equation model), which captures attributional processes by modelling the outcome of elections based on incumbency and economic variables. We extended this model by including an objective measure of candidates’ charisma for elections from spanning from 1916 to 2008 so as to also capture inferential processes. In the second study, we used a more traditional business context and recruited over 700 participants to take part in an experiment. We asked participants to watch one of six versions of a TV news report on a fictional UK company we called BlueTech. In this TV news report, we manipulated information about the firm’s performance and the charisma of it’s CEO (e.g., you can see here the video we used in the condition with a charismatic CEO and good company performance: https://www.youtube.com/watch?v5zN1RPthANFA). We then asked participants whether they would vote to reappoint or replace the current CEO if they were sitting on the board of directors.

What did you find?

We found that both of the mechanisms we outlined above worked in combination to predict leader evaluation and selection. Basically, observers mostly rely on attributional mechanisms when performance signals clearly indicate good or poor performance–that is, if, as a leader, you are doing demonstrably well or badly, charisma and matching the image of an ideal leader is less important to the observer. But when there is uncertainty about how well an organization is doing–what we term attributional ambiguity–observers will rely on inferential processes and the image of the ideal, charismatic leader will be used as a measuring stick. However, what was surprising to us was that, in the experiment, charisma still mattered even when performance signals were clear in one direction or the other—so whether or not you’re doing a good job, it might be worth trying to be more charismatic!

What are the implications for business?

What this study has shown is that charisma plays an important role in the selection and retention of top level leaders–both in the business and political context—and that it makes the most difference when performance signals are ambiguous. This raises many questions for businesses and for business leaders themselves. For instance, how does a company replace a charismatic CEO? When should leaders dissociate or associate themselves from performance signals? It also provides clarity on why leaders are selected and could prove useful to companies looking to review their leadership hiring processes. And more generally, we believe that the mechanisms we identified here should apply to a broad variety of performance appraisal situations.

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